Ukraine plans to issue NFTs to fund armed forces

Ukraine aims to become the first developed country to issue its own collection of NFTs (non-fungible tokens), as it looks to capitalize on a flurry of cryptocurrency donations to fund its war against Russia.

Mykhailo Fedorov, Ukraine’s deputy prime minister, announced the plan in a tweet on Thursday and said Kiev would reveal details of its NFTs soon.

The move is the latest sign that the Ukrainian government is embracing digital assets as a way to fund its armed forces in battle, and comes after the country raised more than $270 million in ” war bonds”.

Since the conflict began, Ukraine’s official Twitter account has appealed for cryptocurrency donations, touting addresses for people to make transfers in bitcoin, ethereum, solana and polkadot.
Cryptocurrencies totaling nearly $50 million were donated to the government, according to a transaction analysis by data firm Elliptic.

The latest move will see the Ukrainian government step into the world of NFTs —​collectible tokens that are pinned to the blockchain and therefore cannot be replicated. Sales of the digital assets increased in the last year, making it a global market worth US$40 billion (R$202 billion).

The Ukrainian government had previously announced plans to reward cryptocurrency donors with an “airdrop”, a term used to describe the free transfer of a digital asset, to encourage people to donate.

However, Fedorov said on Thursday that he was canceling those plans and would not issue “fungible tokens”. Instead, he confirmed that the country would launch NFTs to support the Ukrainian military.

It is unclear what these NFTs will consist of or whether they will be transferred for free or sold at auction to raise additional funds.

Ukraine has already shelled out $14 million worth of cryptocurrency to invest in the conflict, Michael Chobanian, president of Ukraine’s Blockchain Association and a central figure in the fundraising effort, told CoinDesk TV on Tuesday.

Uniswap, a decentralized cryptocurrency exchange, also allowed tokens listed on its website to be exchanged for ethereums and donated to Ukraine in a single transaction.

An NFT of a pixelated smoking man, wearing a blue bandana and sunglasses, from a popular collection called CryptoPunks, worth around $200,000, was also sent to Ukraine’s cryptocurrency wallet. this week.

A Decentralized Autonomous Organization (DAO), backed by Russian activist group Pussy Riot, raised $6.6 million from the sale of a Ukrainian flag NFT to a group of donors.

Gavin Wood, co-founder of Ethereum and founder of Polkadot, donated $5.8 million to the government of Ukraine in polkadots, while another DAO backed by Solana and the government of Ukraine raised about $1. .4 million (R$ 7.1 million) to “directly help Ukrainians in the field”.

This comes as the European Union is considering measures to ensure Russia does not use cryptocurrencies to circumvent economic sanctions. The US and UK governments have also raised concerns that cryptocurrency transactions could become a hidden route to move money to and from Russia.